Levelling-up and Regeneration Bill (First sitting)

Alex Norris Excerpts

Committee stage
Tuesday 21st June 2022 Public Bill Committees

[Neil O'Brien]

Q One of the missions takes forward the Government’s ambition to increase our public domestic R&D spending outside the greater south-east by a third over the spending review period. How do you feel about that mission? On the level of ambition, are there things you would change about it; is the balance right; should we be doing things in a different way; should we be locking it in more tightly? Given all those different sorts of questions, is that balance between that objective and other priorities for UKRI right? How do you feel about the mission broadly speaking?

Professor Dame Ottoline Leyser: It is good to have those kinds of clear targets and goals. That is helpful. I think it is a long-term ambition, and that is another critical element of both the Bill and the missions, having those clearly articulated long-term goals to steer towards. The SR element of it is obviously much more rapid, and made in the context of the rising R&D budget across the SR, so I think it is achievable.

From my point of view, it is important to stress that our spend distribution does not meet the target from the Department for Business, Energy and Industrial Strategy. There is the broader Government target for the whole of investment, of 30% and 40% set out in the missions, and then there is a specific BEIS target of 55% outside the greater south-east. Our spend does not meet that at the moment—we are only part of the BEIS spend—but the critical element from that point of view is that in our open competitions for funding, we have flat success rates across the country. The news that we are investing more in the greater south-east than outside that area is because we do not receive the applications.

A lot of what we need to do is capacity building. We need to think hard about how we support the excellent research and innovation that we see right across the country to galvanise and bid into our schemes, making sure that the schemes we put forward are equally open to everyone right across the country and that the targeted interventions that we put in place, of which there are some—they are only going to be a small proportion of our overall investment—are carefully considered in the context of the wider capacity-building activity to drive up opportunity for everyone right across the country.

There is excellence everywhere, however, and we can see that, for example, in parts of the recent research excellence framework. One hundred and fifty-seven universities across the UK made submissions to have their research assessed in that exercise. There is world-leading research in 99% of them, according to the assessment process, which can lead activity. Harnessing the benefit of that will be critical to the levelling-up agenda and to the wider economic recovery from the pandemic that we need to drive.

Getting back to your question—are those the right ambitions?—I suppose I am inherently more in favour of outcome and output ambitions than I am of input ambitions but, none the less, I think having those clear targets behind which we can align our activity in UKRI and more broadly across Government is very helpful in embedding this agenda right across everything that we do. That will be critical to success.

[Alex Norris (Nottingham North) (Lab/Co-op)]

Q Thank you, Professor Leyser, for your time this morning. In your role as a member of the Levelling Up Advisory Council, with respect to levelling up, do you think that at the moment things are getting better, or are they getting better quickly?

Professor Dame Ottoline Leyser: That is quite a difficult question to answer. At the moment, things are very challenging right across the country. We have the inflationary pressures caused by a combination of the tail of the pandemic and the war in Ukraine. That has come on the back of the pandemic, which also caused a lot of economic and social shockwaves across the country. Both those things, if anything, amplify disparities for a whole variety of reasons. Because of those factors, it would be difficult to argue that things are getting better.



Having said that, and looping back to what I said at the beginning, I am very encouraged by the ambition—reflected in the Bill and the White Paper—to take on some of the really big, long-standing and multifaceted problems; to get to the root of them and tackle them through this concerted, aligned action. That is not typical, because we have tended to work in silos when dealing with particular aspects, which does not work as well as integrated, concerted actions. A lot of the important problems, such as health inequalities, are multifaceted, and we do not solve them by simply looking at, for example, the health system. I am encouraged by the new approaches that are being taken to try to address some of the problems, but I do not think they are yet biting.

[Alex Norris]

Q You mentioned the importance of the missions in your first answer. The missions themselves do not appear in the Bill in explicit form, as they do in the White Paper; rather, it is stated that there should be missions. You will have heard the concern from the Opposition, and indeed from others, that that approach will give Ministers a lot of freedom and perhaps the ability to mark their own homework. How do you think we could get some independence into the system?

Professor Dame Ottoline Leyser: I think that, because these are really long-term missions, writing them into the Bill has a lot of risk. As we have just discussed, maybe the missions are not ambitious enough in some contexts; as time moves on, that gap might widen and it may be important to increase the ambition in a mission. There need to be embedded mechanisms to keep under review the success of the missions and then to increase them, for example, if that is the appropriate response, or to respond to an entirely new opportunity that was not envisaged when the missions were set. So not writing the missions into the Bill is actually a sensible approach.

Having said that, I agree with you that the whole point about missions is that they have to be really clear, identifiable and quantifiable targets that we are driving towards through multiple, concerted actions, and there has to be continuous monitoring of the progress being made. That has to be a key element of how the missions are run. I would absolutely hope that there would be external scrutiny, as well as transparency in the publication of the progress towards these goals, and then at least parliamentary scrutiny, which I am sure will be rigorous, of that progress and of the actions that need to be taken if the progress is not as robust as one would like.

Should there be some completely independent external body? In the spirit of the missions, only if it has a really clear purpose and remit beyond what can be achieved through the transparent publication of progress towards the targets and the scrutiny that there will already be on those targets. I agree that what is happening needs to be really clear, as does what needs to be done if progress does not happen fast enough. There are many options for how that is achieved and I am sure the Committee will have the expertise to make choices about which of those options is preferable.

[Alex Norris]

Q Thank you. I have just one more question, turning to your work and your previous response on regional growth. You have been part of a really successive triangle of work in Cambridge that brings together business and academia and has had great development success—success that we are seeking to see elsewhere in the country. What are the features of a local economy that really motors like that? What do we need to have elsewhere in order to see that success?

Professor Dame Ottoline Leyser: This is a topic of tremendous interest in UKRI: how do you build clusters of activity that create self-sustaining positive feedback cycles that really grow things, anchored in a place? A lot of work has been done examining this over the years, in many places. As usual, it is a combination of factors. In many cases there is a lot of evidence that anchor institutions seed a lot of that activity, be that an excellent university, some kind of prime industrial presence or an excellent research institute—for example, a public sector research establishment or a catapult. Some kind of anchor activity fuels a critical element of the cycle, which could be on the research side or the innovation side, or hopefully a combination of the two. That is one of the key components.

The other absolutely critical element is about people—skills and people. A local environment anchors people there by providing the kind of living and working environment that attracts people to a region. Anchor institutions contribute to that, but so does the skills environment—the skills, training and opportunities that are available. For me, joining all those things up is particularly important. In the context of people, such an environment is one in which people go for a particular reason for a particular job, but the opportunities around that environment are such that there are other jobs that are also exciting.

It is about getting that dynamic mobility of people between, say, the university sector, the SME sector—small and medium-sized enterprises—and the more prime business sector, with people moving around and all the allied activities needed to fuel that, such as the local policy and the investment communities that go with that. Joining all that stuff up in the local ecosystem, through strong leadership locally—a critical element—and those key anchor institutions, provides exciting opportunities for people to build a whole variety of careers, working through that ecosystem.

Those are the key ingredients, and UKRI obviously has a role in supporting several of those, but they can only be successful in the context of that broader alignment between local leadership and the wider attractors needed in a local environment to bring people in and keep them there: transport networks, cultural institutions—those kinds of things.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

Q You will be aware of the allegations—the suspicions in certain quarters—about how transparent and impartial the allocation of the towns fund awards were. Given that similar concerns have been expressed by the Public Accounts Committee about the potential for this with levelling-up funds, what measures do you think would be helpful to allay the fears that distribution of levelling-up awards might be open to similar charges of lack of transparency and of impartiality?

Professor Dame Ottoline Leyser: I am not sure exactly which funding you are referring to. From the point of view of the funds that are being allocated through UKRI, as I mentioned earlier, the funds that are explicitly placed—targeted—are not a very large proportion of our overall funds. For me, the key goal is to think about it in the context of the capacity-building element that I said is so important. There should be local empowerment and local consideration about what would be the best interventions in those places.

We have run the strength in places programme for a while, and it has run on a fully open competition. One of the advantages of fully open competitions is that they provide an equal opportunity for everybody to begin with, which is good. On the other hand, they are slower and more bureaucratic, in that you have to run the open competition. There is an interesting balance to be struck between that process and the ability more rapidly and fluidly to allocate money to places, so that they can use the money in a way that targets their local priorities.

We are in the process of working out how best to work to deliver the new funds that have come through the recent spending review, which are being targeted specifically at three regions. Those regions were selected based on evidence that that kind of injection of cash could really drive the capacity building that I described. There are very high-quality objective measures of how you can consider that capacity in different places and, therefore, the impact of the funding that goes in. I would absolutely agree with you that it is really important, in the context of a levelling-up agenda, that funding is seen to be allocated fairly with the opportunity for everyone to access the benefits of those funds.

--- Later in debate ---

[The Chair]

We will now hear oral evidence from Tracy Brabin, Mayor of West Yorkshire. Should I say welcome home, Tracy, or welcome back? The panel has until 10.50 am. For the record, will you please introduce yourself formally?

Tracy Brabin: Hello everybody. It is good to be back, even if it is virtually. I am Tracy Brabin, the Mayor of West Yorkshire, and I am joined by—

Ben Still: Hello everybody. I am Ben Still and I am managing director of West Yorkshire Combined Authority.

[Alex Norris]

Q It is lovely to see you again, Tracy. It is a little different with all the screens, but we are really grateful for your time this morning. My first question is quite an open one. You, as Mayor of West Yorkshire, have similar powers to lots of other Mayors, but different powers from some others. What more would you add to your role—whether that is powers that other Mayors currently have or other things done by central Government—that would mean you could do what you are seeking to do in West Yorkshire?

Tracy Brabin: Thank you so much, Alex. Let me open by saying how welcome the Bill is. Finally, we have got to a point where it feels like it is going to be a real thing. The mission statements are also very welcome. I chair the M10, which is the group of Mayors around the country, and we are very positive about this next step and the opportunities for us to work with Government to really understand what devolution is about. The idea of more Mayors across the country joining the M10 is incredibly welcome.

When it comes to more powers, I think there is a more fundamental question: where do we want to get to with this Bill, and what is the strategic relationship that we want to build with Mayors and with Government? If we are taking powers from Whitehall and giving them to regions and elected Mayors, what freedoms are we then giving to those Mayors to deliver? In the Bill, there seems to be a focus very much, and quite rightly, on the accountability of Government, but there does not seem to be that equivalence of the accountability of Mayors to deliver.

We have said all along, in every meeting we have been in with Ministers, “We can help you deliver on your missions.” For example, on climate change, we have met the Government and the M10 has met the Government to talk to them about more powers and how we could help hit the zero carbon target of 2050. In our region, our target is 2038, so we could be outliers for Government to help deliver. However, there is not that detail and that understanding of who is going to deliver these outcomes. I think the Committee will wrestle with that over the next few months. Whose responsibility to deliver the outcomes?

I have always said that the way to level up in West Yorkshire is to have that London-style transport system, which is one of the mission statements. Unfortunately, the integrated rail plan meant that we were not able to benefit from the billions of pounds of investment that would come with that strategic project. It is really important, as an attractive region to international investors and inward investment, that we have a skilled workforce. At the moment, we are a bit hamstrung on delivering the types of skills we need in an agile way in response to business, because we are being told by Westminster, “This is the project; this is what you have to deliver” without the understanding of the complexity of delivering skills training for those furthest away from going back to college.

On climate change, we have to get away from the beauty contests and the way we have to bid for funding for projects—for example, for electric vehicle charging points. We have to be given the autonomy to help the Government to deliver on their mission statements. There are a number of points there, Alex, but we will get into a little bit more detail as we go further into the session.

[Alex Norris]

Q I appreciate that, Tracy. Given the company that you have this morning, this is probably a pertinent question: can you talk to us—from your own personal experience and having talked to your colleagues in the M10—about what it is like to work with a combined authority and about the features of a good local collaboration?

Tracy Brabin: I have been pretty blessed in that the combined authority has been in existence since 2014. Although we took a wee while to get to the actual landscape and the footprint of a combined authority, we got there. It has been incredibly efficient, because I landed in a position where a lot of work had already been done to set up the mayoral combined authority. Now, that is not the same across the country. When our colleague Dan became Mayor of South Yorkshire, that infrastructure was not set up. We are, I would hope, one of the most efficient and progressive MCAs; that is my target—to be the most progressive MCA in the country.

Certainly, there is lots that we are already doing that is reflected in the Bill. For example, there is the extra scrutiny. We were determined to ensure that we had proper scrutiny in place, so we went from one scrutiny committee to three. We also pay our scrutiny members for their time. However, the Bill could go further and have that commonality across the regions—really investing in our scrutiny members and allowing them to meet remotely. The current expectation that people have to meet in a room means that quorum is sometimes challenging. During covid, we managed to make it secure—and look at us now, doing governmental business remotely. I would really hope that this Bill could ensure that we could have that scrutiny locally, and delivered in a more modern way.

Fundamentally, the idea, for us as a combined authority—we are five regions with Labour council leaders—is that we have a combined mission of delivering for the people we represent and who elected us, but there is a challenge in that when we come to the Government with our vision, there is this beauty contest and these funding streams. There is also a churn of Ministers and a churn of ideas from Ministers. It would be really empowering to have a direct relationship with the Treasury and could get the funding pot, with the delivery assessed on the outcomes. We could then have extra scrutiny from not just our own colleagues here in West Yorkshire but, potentially, the Public Accounts Committee and Committees like yourselves. We could be part of the outcome story, rather than just waiting for the Government to open up the floodgates on things we have to bid for, in which case it is all about the scrutiny of the process rather than the outcomes.

Ben Still: The partnership for an MCA to be successful must be deep, and there must be a strong sense of shared endeavour. As the Mayor has said, the five West Yorkshire leaders and the Mayor work very hard to develop that sense of shared endeavour. We can see that in the fact that the combined authority has specific sub-committees dealing with individual sectors, each of which is chaired by one of those local authority leaders.

We also have cross-party representation on the combined authority, so that—I think we will come back to this theme—ideas and policies that are developed through the CA can stand the test of time and be long term, as was discussed with the last witness. We completely agree that the long-term nature of these policies means that they have to be sustained over successive Parliaments and successive mayoralties.

Tracy Brabin: It is unusual to have cross-party membership of the combined authority. In parallel, we have our local enterprise partnership board, which is one of the most diverse in the country. We have a strong relationship with that LEP board too. As I say, the structures are here in West Yorkshire to deliver. The history of delivery is there from previous funding streams, where we have delivered and spent every penny—

[The Chair]

Tracy, I am going to have to cut you off, because we need slightly shorter answers. I will ask the Minister—who does not believe in “churn of Ministers”—to ask you a question.

--- Later in debate ---

[Neil O'Brien]

Q That is very helpful. In your earlier answer you drew attention to the lack of UK-wide indices of multiple deprivation. We know that in the first round of the levelling-up fund, the 50% of local authorities that had the lowest median pay got roughly three quarters of the investments—it is targeting poorer areas. Would it be attractive, as part of the data drive in the levelling-up White Paper, to create more UK-wide indices of deprivation and other things?

Mairi Spowage: Yes, I would be very supportive of that. We can see in the sorts of metrics that are used—not only those related to indices of multiple deprivation but educational outcomes or transport connectivity—that some of them are focused on England-only measures; sometimes they are GB only. We do not want to fall into the trap of, in some cases, using GB and UK inter-changeably here. It is really important that we think about the metrics that we are going to use to capture the reduction in regional inequalities across the UK. Wherever possible, we should invest in developing UK-wide measures.

In some cases I can see that there are data sources in the devolved nations that are very similar to those being used for England. I think there is work that could be done to develop more consistent measures right across the UK, for which, as I said earlier, there is a clear policy need for the UK Government’s programme.

[Alex Norris]

Q Thank you for your time this morning, Professor. Can you expand on an element of a previous answer you gave about the work that the Office for National Statistics, of which you are a fellow, is doing on developing a dataset in that area?

Mairi Spowage: I am not here to speak for the ONS, but I am a fellow, so they ask me and a group of other expert academics for advice on their work programme. They have published a subnational data strategy, which was worked up not just by the ONS but across the Government’s fiscal service, to think about how we can develop more sophisticated metrics across the UK to capture different levels of needs and progress. That would be to support not only the levelling-up agenda but things more broadly. In partnership with the Department for Levelling Up, the ONS is looking to develop more metrics across the UK. Some of that will be working closely with the devolved Administrations to develop data sources and think what might be comparable.

We have done a significant amount of work with the Economics Statistics Centre of Excellence. We published a paper recently on developing a suite of sub-national indicators across the UK. We made recommendations there, which included working closely with the devolved Administrations to develop data that was consistent across the UK, particularly on educational and environmental outcomes. A recent example would be something like fuel poverty, which is obviously a live discussion. It is measured differently in all four nations of the UK, so it is very hard to compare differential rates of fuel poverty in different parts of the UK at the moment.

[Alex Norris]

Q Do you feel that the outcome of that work might be a definitive set of statistics and measurements that we could use in this space, that we could perhaps seek to build consensus around? Is this particularly contested space in your community? It is in ours, as you may have noticed.

Mairi Spowage: It is always difficult to come up with a set of metrics that everybody is going to agree with. One of the most challenging things, particularly if you compile them in an index, is how you weight them together, which things you give most prominence to, because if you are weighting metrics that are more focused on, perhaps, income deprivation and you are focusing less on rurality, you will get quite a different allocation of resources from the one that you will get if you are giving more weight to lack of connectivity, or rurality, than income deprivation. That is just one example. Most of the indices of multiple deprivation have income and employment, education, health, crime, and access to services, as well as housing. The weights that you give to these things can be contentious and, depending on the weight that you give to things, there can be quite a different outcome in your allocation.

It is obviously possible to come up with a consensus on things like the indices of multiple deprivation. The different nations show that you can come up with something that broadly everybody agrees is sensible, but even with the indices of multiple deprivation, which are well established, policy makers in rural areas would say that they do not capture rural disadvantage very well at all, because the geographic areas that tend to be used for rural areas are very large and do not capture pockets of deprivation within rural areas. Even with those established metrics, people in rural areas have argued for many years that they do not serve them well. I think it is difficult to get a consensus, but there is a good basis to start from, in terms of the long-established 20 or 30-year discussions about indices of multiple deprivation and how to measure that across the UK.

[Alex Norris]

Q That is a very handy caution for us with regard to using these statistics for allocation purposes. When it comes to measuring progress, would it be a little easier if we were not seeking to aggregate and to weight them but instead to use them as some sort of dashboard such that we would be able to form some sort of consensus on what indicators would show whether we were levelling up across the UK? Would we be able to reach a kind of breadth there, certainly in your community?

Mairi Spowage: Yes, I think that is possible. In terms of the sorts of metrics that we could use, it will be important that the metrics used capture the outcomes of what we are trying to achieve and not just inputs or outputs, but I do think it will be possible, and I agree with you that it makes much more sense, when we are thinking about whether the interventions that we are pursuing are making progress on the outcomes that we are interested in, to look at those as a suite or a dashboard of indicators, rather than trying to come up with some index overall. Yes, absolutely, it should be possible to come up with a suite of indicators that are broadly agreed upon. However, there are things like the Scottish national performance framework, trying to measure the 11 national outcomes that the Scottish Government have set out through consultation with Scottish public life and communities about what is important. Just be aware: 81 indicators are used to capture that, and having 81 indicators makes it quite difficult to say overall whether we feel we are progressing to the sort of Scotland that we want to see. It can be difficult to come up with something that is comprehensive enough and that does not become unwieldy.

[Tim Farron]

Q Hi, Professor; good to see you with us. You mentioned earlier the situation regarding a tight labour market. Thinking about rural communities in Scotland and England in particular and elsewhere in the UK, to what extent you think an absence or a lack of workforce is hampering those economies. In the Lake district, 63% of hospitality businesses last year reported that they were working below capacity, because of the lack of workforce. To what extent do you think that workforce problems—or lack of workforce—are hampering economic growth in certain areas? What is the cause? Does the Bill do anything to solve those problems?

Mairi Spowage: It is a massive problem. For all the businesses we talk to on a regular basis right now, it is their No. 1 issue. They are very concerned about their energy, fuel and input costs going up hugely, but their biggest problem is sourcing staff, particularly businesses in rural areas. It means that they do not open as much in many cases, particularly when we talk to hospitality businesses—they are not serving non-residents for dinner, or they are not opening on all days of the week. That seems to be quite common across the Scottish businesses we talk to on a regular basis, so it is an absolutely huge problem.

What is causing it? Well, for many years, there has been a movement—within Scotland at least, which I am more familiar with—from rural to more urban areas. In Scotland, there has been movement from most areas to Edinburgh and its surrounds, to be honest. That is projected to continue. If it does, that has some pretty huge consequences for rural areas. Obviously, housing plays into it as well, with young people in an area being attracted away, perhaps to study, but also for employment, and not being able to afford to buy houses in the local area. Certain parts, particularly the highlands, have huge issues with second-home ownership dominating particular settlements.

Those are all issues. With some of the pressure valves that we used to use a lot in rural areas in Scotland around EU labour, it is not quite the same situation any more, so we are not seeing the same supply of labour from that sort of source that we did in the past. That definitely seems to be causing issues, particularly in hospitality and social care.